What is the biggest mistake made by many futures traders?
The biggest mistake that most traders make, especially new traders, is trading too much with too little capital. There are sound mathematical reasons to expect such trading activity to ultimately result in loss and, in fact, this has been confirmed by numerous reports and surveys within the industry: most traders starting out with $5,000 or less tend to lose their money within the first six months of trading. The key to successful trading is to gauge your trading activity based upon your capital, and allow plenty of cushion in the form of excess margin for unexpected price movements.

Is it possible to make really big profits trading futures?
Yes, it is, but keep this in mind. There is a relationship between risk and return that has shown to hold over time, namely, that higher returns are often associated with higher risk. So while it is possible to make big profits trading futures, the trader is also exposed to considerable risk - risk of losing money. Beginning traders are probably better off "lowering their sights" a little and, consequently, playing it more safe.commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.
What exactly is leverage?
Leverage is a measure of the market value of your futures position relative to the amount of your trading capital. The greater the degree of leverage, the more futures value you control relative to your capital. Futures contracts, in themselves, are highly leveraged instruments: a little bit of money controls a lot of futures value. For example, some futures can be bought or sold for as little as two percent of the market value of the futures required as margin. It is leverage that enables tremendous profit or loss to be made relative to your trading capital. High-leveraged trading implies that you are using almost all of your available capital to meet margin requirements, and entails considerable risk as it can result in significant gains or significant losses. Low-leverage trading implies that you have plenty of excess capital in your account to cover unexpected price movements, and is consequently less risky. Properly controlling leverage is a necessary requisite to trading futures successfully.commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.
How can you sell futures if you don't already own them?
One of the greatest advantages of futures contracts is that you can sell them without first owning them. The reason that this is possible is because futures represent an agreement to buy or sell something at some time in the future. Because it represents a deferred transaction, futures can be sold just as easily as they can be bought. There is no difference at all between buying and selling from a trading perspective. Thus, a futures trader who expects prices to fall can sell futures now and hopefully buy them back later at a cheaper price, and make a profit.commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.
Will I get a truck load of soybeans dumped in my yard?
When a futures contract expires, the seller must deliver to the buyer whatever commodity is represented by the futures, such as corn, beans, or live cattle. This is ideal for farmers who use futures to sell their crop, but a problem for traders who neither wish nor are capable of physical delivery. Fortunately, there is any easy way to handle this. The futures trader only needs to offset their position prior to contract expiration. For example, traders who are long beans must sell all of their bean contracts prior to expiration. Similarly, a short futures position is offset by buying back futures. Once offset, there is no longer any obligation outstanding and the trader need not worry over having a truck load of soybeans dumped in their yard.commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.
Where are futures traded and where can I get prices?
Futures are traded only on designated futures exchanges, and in pits allocated specifically to that particular futures. You can be anywhere on the planet when you decide to buy or sell a futures, but to be executed, your order must get to the pit. That is the job of the broker. You call your broker with your futures order, and they relay it to the pit where it is executed. By law, futures orders cannot be executed outside of the pit. (Some exchanges also use automated trading facilities or computer networks which serve as trading pits.)

Futures prices can be found in many places. You can find Internet links on the World Link Futures web site. Any widely circulated business newspaper should list the major futures contracts on a daily basis, providing volume and open interest information as well as price data.commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.